One hundred years of fortitude

The South-based TVS group turns 100 this year. Many may be familiar with individual group companies like Wheels India, Brakes India, Lucas TVS, Sundram Fasteners, Sundaram Brake Lining and TVS Motor Company, without realising they all belong to the TVS group. With a group turnover of $7 billion or R35,000 crore, it employs more than 40,000 and is India’s largest manufacturer of auto components.

Barring one or two companies, they have been market leaders in their respective fields. It is quite likely that automobiles manufactured globally carry one or other of TVS parts. Among the vehicles on India’s roads, it is said 35% consists of TVS components. What is quite remarkable about the group is that the companies have maintained their reputation for quality and customer care over so many decades. T VS to them stands for Trust, Value and Service.

Group founder TV Sundaram Iyengar registered a company in 1911 and started South India’s first passenger bus service in 1912. Although this pioneering venture was wound up a few years later, Iyengar went on to open an automobile sales and service unit in Madurai in 1919, dealing in motor tires, auto spares and ancillaries. Over the next decade, he acquired sub-dealerships for Ford and Chevrolet cars. A few years down the line, General Motors gave him the sole dealership for all their vehicles.

In 1939, TVS ventured into transport service yet again, setting up Southern Roadways in Madurai. It soon became the country’s largest goods transport fleet in the private sector. The passenger division was nationalised in 1970. Its efficiency and customer service were legendary and people are believed to have set their watches by the bus timings.

Between 1950 and 1960, TVS expanded its activities and diversified into related fields. The importance of marketing spare parts was recognised even in those early days and distribution channels were set up wherever possible. It forayed into automobile insurance. To help transport operators buy vehicles, a hire purchase company, Sundaram Finance was set up in 1954. Today, Sundaram Finance is one of the largest and most-respected non-banking finance companies in the country. The sons of Sundaram Iyengar TS Rajam, TS Duraiswamy, TS Santhanam and T S Srinivasan became the architects of the group.

Till 1960, TVS did not enter into manufacturing. The government, however, was keen on building an indigenous automobile industry. GM, which had been assembling vehicles from CKD kits, refused to manufacture vehicles in India as it did not feel the country had a proper industrial base. Years later, Sundram Fasteners, a TVS star would become a dedicated supplier of radiator caps to GM and also win the best supplier of the year award from the MNC many times over. But GM’s India exit was a catalyst for change at TVS, as so many of its activities were built around the GM dealership which came to an end in the mid-50s. Premier, Telco, Ashok Leyland and M&M were all putting up plants and the need for indigenisation was increasingly gaining momentum.

TVS with its highly profitable agency business and the transport fleet was a cash-rich group. The family did not have to rely on outside funds to enter manufacturing. Given its track record, it was not difficult for TVS to enter into viable collaborations with the world’s leading component manufacturers, who at that time were all British. The manufacturing companies were set up in the vast Padi complex in North Chennai. By the seventies, the group had reached its dominant position in wheels, brakes, auto electricals, fasteners and many related components.

The group gained further momentum under the family’s third generation. Some well-known names include Suresh Krishna S Ram, S Viji, Venu Srinivasan, TK Balaji, K Mahesh and R Dinesh. The TVS companies did not want to go public until it became necessary and when unlisted companies started getting taxed more than listed ones. However, the group never got addicted to the stock market or market capitalisation. Financial institutions have been more than willing to finance their projects.

Problems emerged in the seventies. The close-knit family started coming apart. For the first time in the group’s history, it faced a major strike in 1977. By the eighties, both problems were resolved. The group, in fact, has an enviable reputation for good labour relations. Sundram Fasteners has never lost a day to labour unrest. In 1980, Sundaram Clayton launched TVS 50, the country’s first two-seater moped. This division metamorphosed into TVS Motor, the third-largest two-wheeler and three wheeler manufacturer in the country, run by Venu Srinivasan. In the eighties, the group adapted itself to supply to the Japanese vehicles entering the market even though all of its partners were British.

When the economy opened up in the nineties and many foreign automobile and component manufacturers rushed in, analysts started writing off indigenous groups like TVS. They did not think this conservative family-run business could survive liberalisation. The group quietly reinvented itself and grabbed the opportunities presented by the reform era. The first thing the group companies did was to divorce their joint venture partners, some of whom had shackled TVS’s export ambitions. Leaving its partners brought financial independence and the freedom to choose the technologies it wanted.

The partners were also putting shackles on export market. The TVS group companies have turned global players, achieved with their fanatical commitment to quality. They got the ISO certifications, Deming award (the Oscar of quality) TPM and TQM awards way ahead of others. All the awards were calling cards to the export market. Today, TVS group companies are truly international, with all of them buying companies in different counties and putting up plants. TVS Logistics, one of the newer companies in the group, has gone on a major buying spree in the last few years.

The group will have to make strategic decisions on whether to expand locally or globally in the next few years. The TVS family is also fortunate that the fourth generation has entered the business and as people who know the family say, they are all highly qualified and have earned their place in the business.

In spite of all its achievements, the TVS groups hides its light under the bushel. There are no celebrations yet for the centenary year. No uncorking of champagne bottles. It is business as usual at all the group companies.